Feds Probe Spending for Virtual Fence

Cost estimates for Boeing-led border security project now as high as $30B

Leading House Democrats and government accountants are scrutinizing The Boeing Co.’s multibillion-dollar contract to design and build a U.S. border security system rich with advanced perimeter-protection technology. And they are raising serious concerns about the project’s cost and management.

The U.S. Department of Homeland Security initially said the high-tech fence, called SBInet, could cost as little as $2 million, but the price could balloon to as much as $30 billion, according to one congressman. The fences along the Mexican and Canadian borders will include all-weather electro-optic gear, infrared cameras, radar and digital communications equipment.

The DHS, which will give estimates only for the Mexican border portion of SBInet, said the southern section will cost $7.6 billion through 2011, according to a report issued earlier this month by the U.S. Government Accountability Office.

Milestones have not been set for the Canadian border, although the DHS told the GAO that the upper limit of funding will provide border security technology for “6,000 miles of secure U.S. border,” which includes both the northern and southern borders.

In recent hearings, two congressional Democratic leaders have questioned the way the Boeing contract is managed. One hearing was held two weeks ago before the House Homeland Security Committee.

Rep. Bennie Thompson (D-Miss.), chairman of the House homeland security panel, took note of the 65-page GAO report questioning the management of SBInet. “After reading the GAO assessment of SBInet, it seems that the department’s scattershot approach of issuing different, interdependent task orders simultaneously leaves the program vulnerable to collapsing on itself, like a house of cards,” he said.

In a Feb. 8 hearing, Rep. Henry Waxman (D-Calif.), chairman of the House Oversight and Government Reform Committee, warned that SBInet could be subject to waste and abuse, given how the DHS is relying on Boeing and private contractors to design, build and even conduct oversight of the project.

“There seems to be no task too important to be outsourced to private contractors,” Waxman said. More than half of the 98 staff members hired by the DHS to oversee the new SBInet contract are private contractors, he said, and some of them work for companies that are business partners of Boeing, the company the staff members are overseeing.

The GAO said the DHS needs to tighten oversight and accountability of SBInet with “explicit and measurable commitments” for costs and scheduling.

The GAO also said the actual SBInet contract should include quantifiable limits beyond the unclear statement about funding “6,000 miles of secure U.S. border.”

Waxman put the Boeing contract’s value at $30 billion in a statement issued at the Feb. 8 hearing.

DHS Defends Stance

Officials from Boeing and the DHS testified before the two committees and have partly addressed the concerns raised by the congressional leaders and the GAO.

Regarding the ultimate costs, the DHS repeated its “6,000 miles of secure U.S. border” upper limit to the GAO, and a DHS spokesman reiterated that language in an interview last week.

A DHS spokesman said the department has already taken steps to validate the SBInet contract independently. Its chief procurement office certified last November that Boeing had established procedures to prevent conflicts of interest between the company and subcontractors, according to the DHS.

As for Thompson’s criticism about task orders being issued simultaneously, Kia Evans, a spokeswoman for U.S. Customs and Border Protection, stated that the DHS is proceeding “with a sense of urgency on this critical national issue” of border security while remaining sensitive to House concerns.

Boeing’s vice president and program manager for SBInet, Jerry McElwee, updated Waxman’s committee on Feb. 8, stressing that the government, not Boeing, will set requirements for the entire program.

“We do collaborate extensively [with the government], but the final decision is made by the government,” he said.

Project 28, a task order for a 28-mile stretch of border near Sasabe, Ariz., has started, McElwee testified. The order calls for equipping a mobile tower with new technology by mid-June, he said. The DHS has put the cost of Project 28 at $20 million.

McElwee said Boeing is trying to address a variety of terrains and threats, using a “tool kit” approach with different combinations of sensors, communications systems, IT, and command and control capabilities, depending on the area.

Copyright © 2007 IDG Communications, Inc.

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